Report predicts $860 billion in mobile payments by 2013

300 billion mobile payment transactions will be made in 2013, totalling US$860 billion, according to a new report.{ad}

The report, by research firm Informa Telecoms & Media, suggest that revenue from mobile payments in 5 years time will be as high as US$10 billion, a twelve-fold increase on what we see today. Much of the growth will come from emerging markets in Africa and Asia, according to the report.

Expanding on this, John Darnbrough, author of the report, said:

In the developing world, the behavioral change amongst consumers has already begun; mobile payments and mobile banking are already the natural and only financial services to millions of previously unbanked consumers.

The report also predicts that mobile transactions will change in nature; whilst in 2008, approximately one third of mobile payments were for mobile content such as ringtones or games, by 2013 people will be far more likely to be using their mobile to purchase physical goods and services. Alongside this, users of mobile banking are predicted to grow significatnly, from 67 million in 2008 to 977 million in 2013.

Andy’s Opinion
The concept of M-banking has been around for a while, but has yet to hit the mainstream. Security concerns and lack of global standards for mobile transactions have led to lukewarm demand for such services. If Informa’s bullish assessment of the industry is correct, this may be about to change. Darnbrough seems to be putting a lot of faith in emerging markets driving much of the uptake, pointing out m-commerce is seen as an engine for broader economic growth in some regions and in many cases is not competing with much in the way of existing electronic banking or payment infrastructure.

This is a shrewd observation, but people in developing countries often have much older handsets. If m-commerce uptake is dependant on newly-introduced standards and protocols, the developing world may have to wait until the handsets supporting these standards become affordable. In order for the figures Informa predicts to become reality, a simple, cost-effective and secure mobile payment system will need to be ubiquitous across all mobile devices and carriers.

Ultimately, being able to pay for stuff with your mobile makes perfect sense; it’s convenient because you’re carrying it anyway, your mobile can can talk to your bank to verify you have the funds, and it’s potentially more secure than cash or a credit card as it can employ passwords and other authorisation mechanisms. Even if growth isn’t as spectacular as predicted in this report, m-commerce is surely the future.